The Boston-based investment company announced it has launched a US High Yield Bond Strategy with the objective of seeking a diversified and liquid exposure with a low tracking error with the broad US bond market.
SsgA said the new portfolio tries to mimic the returns and characteristics of the High Yield $200 million Very Liquid Index (HYVLI), a customized Lehman Brothers index.
The index represents a diversified index of 300 of the most liquid and tradable BB and B rated issues in the 1,300 issue Lehman Brothers High Yield Index.
State Street Global Advisors’ US High Yield Bond Index Strategy uses a stratified sampling technique to create a portfolio of approximately 120 to 130 liquid issues, matching the HYVLI in duration, issue market weight, and credit quality, the company said.
The strategy’s investment process also incorporates credit analysis from SSgA’s High Yield team in an effort to reduce default and distressed risk.